The outlook sees Asia remaining the primary driver of global demand growth, with China, India and emerging Asia together accounting for over half of the net increase in 2019-25. China is the single largest contributor, led by the industrial sector. India’s post-2020 growth is fuelled by a combination of supportive government policies and improved infrastructure, while emerging Asia’s demand expansion is power sector-driven, underpinned by the addition of 15 GW of gas-fired generation capacity across the region.
Gas consumption in North America grows at just 0.4% annually in the forecast period, mostly thanks to growth in industrial consumption in the United States. Mexican gas consumption grows at a moderate clip of 1.3% annually, in line with new gas-fired power generation. Canadian demand grows at similar rates annually, largely a result of an increase in industrial consumption for process energy and for use as a feedstock. Despite Canadian coal phase-outs, the forecast presents limited growth in gas-fired power generation due to increases in renewable generation.
European gas demand is expected to remain stable through the forecast period. In the power sector, the gradual phase-out of over 50 GW of nuclear-, coal- and lignite-fired power generation capacity creates additional market space for gas-fired power plants. However, growth is limited by the rapid expansion of renewable power generation, set to increase by almost 30% over the medium term. Natural gas demand in industry is expected to recover to its pre-crisis levels, while further growth potential remains limited.
Natural gas demand in Eurasia grows by 0.5% per year between 2019-25, limited by the modest economic growth prospects of the region and the already very high gas-intensity of those economies. The industrial sector alone will account for almost half of incremental gas demand, driven primarily by chemicals and fertilisers, benefitting from the relatively low feed gas costs in the region. Energy industry own use is expected to grow at an average rate of 3% per year, driven by the region’s export-oriented growth in gas production.
Middle East gas demand increases by nearly 100 bcm/y and reaches almost 660 bcm/y by 2025. The largest increments come from Iran and Saudi Arabia (accounting for up to 70% of the total consumption increase), supported by growing domestic supply availability. More than 60% of the net demand increase in the region is from the power and water desalination sectors.
Natural gas consumption in Central and South America is expected to grow at an average annual rate of 0.6% over the forecast period, adding about 5 bcm/y by 2025. Demand growth is led by the power sector, both in terms of volume and rate of growth, with an annual growth rate of 1.1%, driven by growing electricity demand and fuel switching.
African natural gas consumption grows at an average of 3.3% per year to reach almost 195 bcm in 2025. It remains primarily driven by industrial and power generation needs in North Africa’s major markets of Algeria and Egypt, followed by Nigeria. The development of domestic production in West African countries drives the sub-region, which sees an average 6% growth rate per annum (excluding Nigeria), but the overall size of the market remains limited at about 14 bcm per year in 2025.
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Author: phinds